Title: Exploring the Persistent Effects of Sundown Towns and Institutional Racial Discrimination

Olivia Gonzalez

Advisor: Thomas Stratmann, PhD, Department of Economics

Committee Members: Noel Johnson, Stefanie Haeffele

Van Metre Hall (formerly Founders Hall), #4006A
November 19, 2025, 02:30 PM to 04:30 PM

Abstract:

Between roughly 1890 and 1968, thousands of towns and suburbs across the United States enforced policies of racial exclusion to become intentionally all-white communities. Known as "sundown towns" for the threatening signs often posted at their borders, these localities represent a significant yet understudied chapter of institutionalized discrimination that affected thousands of communities. This dissertation bridges institutional economics with the nascent empirical literature on sundown areas to provide systematic evidence of their historical determinants and long-run consequences, while establishing a methodological framework for studying these policies that can be extended to other geographic contexts.

While existing Great Migration scholarship emphasizes Northern economic opportunities and Southern violence as drivers of Black migration, this research illuminates how sundown policies constituted a crucial but understudied constraint that systematically limited residential choice for Black migrants across the Midwest. A central contribution is the first systematic empirical distinction between sundown towns and sundown suburbs—institutional forms previously often treated monolithically despite fundamentally different pathways to exclusion.  Chapter 1 develops and tests multiple measures of sundown status to address measurement challenges inherent in studying policies that were often informal or deliberately obscured. Using survival analysis and other techniques, the chapter estimates the timing and diffusion of sundown policy adoption, revealing that sundown towns typically formed through "reactive expulsion" of existing Black residents from industrializing communities, strongly predicted by Southern White in-migration, cultural transmission, and labor market dynamics. In contrast, sundown suburbs were "proactive enclaves," designed for homogeneity from inception. This taxonomic refinement and empirical approach to quantifying determinants provides a template for analyzing sundown policies in other regions facing similar data constraints and establishes the foundation for estimating long-term effects.

Chapter 2 examines long-run economic effects, demonstrating the critical role that selection bias plays in shaping results. Using propensity score matching on pre-treatment characteristics, this chapter applies quasi-experimental methods for studying historical institutions with limited data. The methodological innovations—particularly in constructing credible counterfactuals for rare historical treatments—offer a roadmap for future research on discriminatory institutions.

Chapter 3 provides novel evidence of institutional transformation, testing whether communities adapted informal exclusion into formal land-use regulation. Preliminary findings suggest sundown histories associate with contemporary zoning patterns, with effects varying by institutional pathway—supporting the "violence to formality" hypothesis of adaptive institutional persistence. By unbundling institutional forms of historical racism and applying rigorous identification strategies despite data limitations, this dissertation demonstrates that historical institutional pathways shape contemporary policy choice, advancing both substantive understanding of how discriminatory institutions persist through transformation and methodological approaches that can guide future empirical work on sundown policies nationwide.